First Home Owners Grant

Instead of scrapping the First Home Owners Grant (formerly called the Great Start Grant), the Queensland Government have extended it until the end of the year! So if you are a first home buyer you could be eligible for benefits of up to $28,750! No, that is NOT A TYPO! Seriously – with the $20,000 building grant and the additional $8750 stamp duty rebate – you could be able to finally purchase your own home! If you are looking at purchasing an existing home (one that is already built), then unfortunately  you are not eligible for the First Home Owners Grant, but you may be eligible for the stamp duty rebate.

So here’s how it all works….

First Home Owners Grant

To qualify for the first home owners grant of $20,000 you must –

  • be at least 18 years old from the date of the purchase,
  • be an Australian citizen or permanent resident,
  • If you’re buying with a partner/ spouse / friend then at least one applicant needs to be an Australian citizen or permanent resident to qualify.
  • not have previously received a first home owner grant in any state or territory of Australia
  • build your own home,
  • buy off the plan (buying usually a unit / townhouse off the plan from a developer before it is actually built),
  • buy a new home that hasn’t been lived in previously,
  • be substantially renovating (and that means a home that has almost been knocked down and then fully rebuilt).
  • not have owned or part owned any property in the past in your personal name (this includes overseas property ownership)
  • purchase a block of land and sign a building contract (in that order) on of before December 31st 2017
  • be purchasing the property for under $750,000

If you are buying with a partner who has owned property before you won’t be eligible for the $20 000 (but you may be able to claim the stamp duty rebate)
If  you have owned property in a Trust, a Self Managed Super Fund (SMSF) or in a Company only then this does not count as having owned a property previously (please contact the Qld Office of State Revenue on 1300 300 734 if you would like to confirm this).

You can use the $20,000 first home owners grant to form part or all of your deposit to get your construction loan.  You will need to ensure that the value of the property does not exceed $750,000.

If you’re buying off the plan or purchasing a newly built property as a single contract this is easy  to work out – but if you are building a new home it works like this: the property value of your home is the cost of the land + the construction costs for the building including all fixtures, fittings and landscaping packages. For example….. if you’re buying a block of land for $300,000 and then spending $410,000 on the build plus an additional $25,000 on fences / landscaping and solar panels then the total value of the property is $735,000.

To qualify for the First Home Owners Grant you will need to live in the property for at least 6 consecutive months commencing within 12 months of the purchase of the property. If you don’t you’ll need to pay back either part or all of your grant and you may be charged a penalty.

In addition to the first home owners grant you may be eligible for a stamp duty rebate. This rebate is also available if you are purchasing an existing home.

To qualify for the first home buyers stamp duty rebate you must –

First Home Owners Grant

  • not previously owned or part owned any residential land or property
  • not have held interest in residential land anywhere in the world
  • have never claimed the first home vacant land concession before
  • be at least 18 years old at the date of the purchase as well as a permanent resident in Australia or an Australian citizen.

If you are buying with a partner who has owned property before, only the person who is the first home buyer can claim their portion of the rebate. If you own the property 50/50, the you are entitled to 50% of the rebate. Similar to the first home owners grant you will need to live in the property but this rebabe is for a period of at least 12 consecutive months commencing within 12 months of the purchase. If you don’t you’ll need to be pay back either part or all of your rebate.

The amount of rebate you can get will vary depending on whether you are purchasing an existing dwelling or building a new property.

If you’re buying an existing dwelling and:

  •  the purchase price is up to $500,000 – you’ll get the maximum full rebate. You won’t need to pay the normal stamp duty (on a $500,000 purchase this is a rebate of $8,750).
  • the purchase price is between $500,000 to $550,000 – you will pay some stamp duty at a reduced rate. For example, on a $505 000 purchase the stamp duty you pay is $1,050 (would normally be $8,925 so you save $7,875) at $525 000 it increases to $5,250 (a saving of $4,375) and then at $545,000 purchase it’s $9,500 (a saving of $875).
  • you are spending $550,000 or more – once the purchase price is $550,000 or higher, the first home buyer stamp duty rebate cuts out so you’ll be charged the same stamp duty as you would if you were buying a home as a normal owner occupier (on a $550,000 purchase this is cost to you of $10,600).

If you’re buying vacant land and:

  • the purchase price is under $250,000 – the full rebate applies and you won’t be charged the stamp duty providing your application is approved (on a land purchase of $250,000 this is and immediate saving of $7,175).
  • the purchase price is more than $250,000 – there is reduced rebate so you will pay some stamp duty. On a land purchase of $260,000 this will be $825 (a saving of $6,700), on a $300,000 land purchase it will increase to $4,125 (a saving of $4,800) and then at $400,000 or more you pay the full stamp duty applicable.

If you are building a home, you’ll only need to consider the stamp duty on the land purchase as stamp duty isn’t payable on the value of the building contract.

This can all be very confusing and you really do need to do your own research as to your own personal entitlements, CLICK HERE to see if you qualify for the First Home Owners Grant or if you just want to have an informal chat about your buying options then feel free to give Chris a call on 0434 449 455.